U.S. Companies Face Fewer Lawsuits, Litigation Survey Shows

The good news is very good: U.S. companies enjoyed a drop in the number of lawsuits filed against them in the past year. Yet the bad news remains inescapably and economically daunting: 83% of U.S. firms were hit with at least one fresh lawsuit in 2006-2007.

So indicate the results of law firm Fulbright & Jaworski's fourth survey of litigation trends in the U.S. and United Kingdom. Some 250 in-house counsel at U.S. corporations participated in the research.

While just 17% of respondents said their companies had escaped a new lawsuit in the past year, that was up significantly from the 11% who made the same claim in the 2005-2006 time period. Also on the plus side, only 22% of in-house counsel said they expected to see a rise in the number of legal disputes their firms face in the next 12 months.

However, the costs associated with litigation remain enormous. Some 40% of U.S. companies said that at least one suit filed against them in the past year exceeded $20 million. Sixty-two percent of billion-dollar businesses were served with at least one $20 million lawsuit. Forty-two percent of manufacturers saw at least one $20 million dispute.

"Companies confront a host of actions -- and adversaries -- in so many areas impacted by credit market jolts, government regulations, media investigations of corporate misbehavior, stepped-up enforcement activity, and one-time events like a recall or environmental accident," notes Stephen C. Dillard, chair of Fulbright & Jaworski's global litigation practice. "Any and all of these occurrences tend to provoke a litigation response in many segments, including consumers, employees, inventors, enforcement agencies and competitors."

Additional survey results show:

Nearly 20% of U.S. survey respondents reported annual litigation spending (minus judgment costs and settlements) is $5 million or higher.

65% of respondents said their company initiated at least one lawsuit in the past year, down from more than 70% in the previous year and 88% in the year before that.

10% of U.S. firms said they had no cases pending in American courts or regulatory agencies.

56% of firms said they settled the majority or all of their new litigation in the past year.

85% of technology companies' in-house counsel said they had been named in at least one patent case since 2004. Oddly, among retail and financial firms, the frequency was even higher, at 89%